ICAC: Morris Iemma fails to dump on Eddie Obeid over motives for ouster

Michaela Whitbourn

Labor politicians have an Olympic-grade skill for dropping juicy quotes into their testimony at corruption inquiries, from references to powerbroker's appendages to slaying cabinet minutes with a stake through the heart.

But former Labor premier Morris Iemma took a novel approach at the Independent Commission Against Corruption on Monday: answering questions without rhetorical flourishes.

Mr Iemma was called to give evidence at the inquiry into Obeid-linked company Australian Water Holdings (AWH) after it heard explosive claims last week that he was rolled in September 2008 in return for a public-private partnership between the company and the state government.

Counsel for Eddie Obeid, Stuart Littlemore, QC, suggested helpfully that claims Mr Obeid and his political ally, Joe Tripodi, removed Mr Iemma from office in exchange for such a deal were ''ludicrous''.

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''I'd not heard any suggestion or any rumours or along those lines,'' Mr Iemma replied, adding he resigned after a ''long-running leadership tussle''.

Vass Kuznetsov, the former financial controller of AWH who was the source of the story, told the inquiry he was speculating on ''whatever was in the papers or the news'' when he suggested Mr Obeid would receive a PPP-shaped pay-off for ousting Mr Iemma.

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''If there were to be a pay-off for such a 'move', who could possibly give it?'' Mr Littlemore asked Mr Iemma.

''Well, I don't know. There would only be a limited number of people … in a sort of position of power and authority to make those sorts of decisions,'' Mr Iemma said.

Measured: Former premier Morris Iemma eschewed the more colourful language of other labour figures in his ICAC testimony. Photo: Nick Moir

It was a victory of sorts for Mr Littlemore, but the evidence did not go entirely his client's way.

Mr Iemma told the commission Mr Obeid called him at home in 2008 to urge him to intervene to ensure state-owned Sydney Water would continue to deal with AWH.

The public utility had become suspicious about the exorbitant costs that AWH was billing to it under a contract to provide water and sewerage infrastructure - expenses ICAC has heard may have included limousines, luxury hotels, airfares and political donations.

Mr Iemma said he did not recall Mr Obeid mentioning that AWH chief executive and Liberal Party fund-raiser Nick Di Girolamo was his son Eddie jnr's ''best friend''.

The inquiry has also heard the Obeids bought a ''secret shareholding'' in the firm in October 2010.

Mr Iemma agreed with Mr Littlemore's characterisation that Mr Obeid was ''representing there'd been unfairness and he wanted help with getting fairness'' for AWH.

But Mr Littlemore inspired a laugh from the commissioner, former Supreme Court judge Megan Latham, when he added: ''Nothing wrong with that, is there?''

''What construction one puts on it is something that happens further down the track,'' a wry Commissioner Latham retorted.